Centrica adds to services with plan for online bank this year
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Your support makes all the difference.Centrica, the British Gas to AA home services group, is to launch itself as a bank later this year, offering its 18 million customers everything from current accounts to mortgages and pensions.
Centrica, the British Gas to AA home services group, is to launch itself as a bank later this year, offering its 18 million customers everything from current accounts to mortgages and pensions.
The company has not yet finally decided whether to team up with an existing financial services giant to operate its planned internet and telephone bank or whether to obtain its own banking licence.
Discussions are going on with the Financial Services Authority and potential partners, and Roy Gardner, Centrica's chief executive, said its plans were now "well advanced".
Centrica already offers credit cards, personal loans, home and motor insurance and Individual Savings Accounts (ISAs). There are 1.2 million holders of its Goldfish card. But Mr Gardner said that the strength of the brand now meant that Centrica could offer a "full-shelf" of financial services products.
In addition to gas and electricity, Centrica also offers fixed and mobile telephone services and appliance repair and home-security services. It plans to expand its plumbing service later this year to include drains.
News of the dramatic expansion into financial services came as Centrica disclosed that the exodus of customers from British Gas had slowed to a trickle while its share of the total energy market was on the increase.
British Gas is adding energy customers at a net rate of 30,000 to 40,000 a week, increasing its share of the electricity and gas market from 35 per cent at the end of June last year to 38 per cent now.
The company's share of the domestic gas market has stabilised at 72 per cent, with just 1,000 net customers leaving British Gas last week. Meanwhile it now has 3.3 million electricity customers and expects the figure to rise to 4 million by the end of the year.
Mr Gardner said British Gas had no plans to raise domestic gas prices in the wake of the sharp increase in oil prices. But it has factored in a £150m increase in the cost of gas supplies next year, assuming oil at $30 a barrel, which it will either have to absorb or pass on to industrial customers.
Pre-tax profits in the first six months rose from £220m to £373m. The contribution from the AA road services, the business acquired for £780m in September last year, was £18m, while membership numbers increased 6 per cent to 9.8 million.
Centrica said that the improvement in the AA's performance, compared with an underlying £3m profit during the same period in 1999, was the result of cost reductions. Mr Gardner said that, including the AA's financial services operations, underlying profits had improved from £12m to £31m.
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